The Pros and Cons of Getting a Prenup

A prenup with a small plastic bride and groom on top.

A prenuptial agreement may either cause one to cringe or spur a sigh of relief—depending on how you look at it. When you think of the word “prenup,” your mind likely instantly associates it with money. And in the majority of real-world examples, this may not be far from the truth. However, there are plenty of pros (and cons) that are not tied to finances—at least not directly.

A prenup, also known as a premarital agreement, is quite simply a contract between two parties that only becomes legally binding upon marriage. It can address a number of topics aside from money, and can provide several safety nets for other aspects of your life.

If the idea of getting a prenup leaves a sour taste in your mouth, you might want to rethink what you know. The best way of getting a better perspective on the subject is to compare the pros and cons of it all. (Spoiler alert: there are surprisingly more benefits than there are downsides.)

Pro: It Protects Your Assets

Before we go further, let’s get the elephant out of the room. In most cases, a prenup comes into play when two to-be-newlyweds come from or have different financial backgrounds. Depending on how it’s worded, it can benefit either the more well-off person or the less well-off one.

For example, the prenup may prevent either party from claiming rights to any assets (be it money or property) that belonged to either individual prior to the marriage. But then, any assets acquired after said marriage would be fair game, right? Not necessarily. You can change the terms to your current or future situation. And this can be a good thing for the person with a lower net worth. Let’s say…if you are expecting an inheritance, you can note it in the prenup and have said money be exempt from any dispute during a divorce. This can be a safe choice for someone with more to lose in case things don’t work out.

Pro: It’s Not Forever

A couple signing a prenup.

Believe it or not, a prenup can have an expiration date. In fact, many prenups do and it is called the “sunset clause.” The document can say that all or some of the conditions in the contract will become invalid should the marriage last a certain amount of years. Therefore, if the relationship lasts, both parties will feel significantly more secure in their future.

Pro: It Protects Your Children

If either party has children from a previous relationship, a prenup is a must-have to protect their future. Should anything happen to one of the parents, a prenup will protect any assets they should be entitled to. In some states/countries, if their parent dies, all assets would automatically go to the spouse unless a special agreement is in place. So, if you think about it, a prenup sort of acts like a will and life insurance policy.

Pro: It Protects Your Business

Just like with children, your should also keep your business (if you own one) in mind. It can be very messy to resolve business ownership and assets in case of a divorce and in many cases, the costs involved outweigh the money one would be entitled to. Therefore, it’s important to include a clause on this topic to prevent problems in case of separation.

Pro: It Can Help Avoid Debt

With many people ridden with student debt (or any debt, really) a prenup can be a lifesaver if you do not want to be stuck paying your ex’s bills after divorce.

Con: It May Create Distrust

A husband and wife at therapy together.

Suggesting a prenup almost always plants the idea in the other person’s mind that their significant other doesn’t trust them. It is not uncommon for the topic to create a rift in the relationship, or even tear it apart. In the long run, one person might end up holding a psychological grudge against the other.

Unfortunately, if there are serious matters at stake, it’s a conversation that must be had and one should approach it carefully. (Any argument you may have at the moment could spiral into a disaster later on.) And as sad as it sounds, divorces are actually quite common, especially among first-time marriages.

Con: Full Disclosure Is Necessary

During the prenup process, you will be forced to disclose all your finances—which can be a bad thing for some (it can also be a good thing, depending on how you look at it). We’re talking about all assets, debt, financial history, credit scores, etc.

While a surprise finding might spark a fight, in many cases the full disclosure of finances actually helps a couple bond. And, let’s be honest, you really shouldn’t be hiding anything—especially on the topic of money—from your to-be-spouse.

Con: It May Be a Waste of Money

Prenups are surprisingly not cheap. Even the basic format you can print from online and notarize can cost you around $500. If you have more serious matters, the costs can skyrocket to several thousand or even over $10,000. Once the prenup becomes too complicated, the lawyer in charge of writing the legal document ends up charging you by the hour.

Basically, if neither party has any significant assets or other liabilities such as children or a business, a prenup may not be worth it—both in money and time. Believe it or not, a complicated prenup can end up being a months-long process.

And unless both parties are writing a simple prenup together, it is highly recommended for each person to have their own lawyer, which will double the cost. Of course, the cost is small in relation to what you could end up paying in a divorce, but you should assess your financial situation before going through with it.

One Last Thing…

As a disclaimer, we should say that none of this is legal advice and how prenups work may be different from country to country (or even region to region). Hence, it is best to consult a legal professional prior to making things official.

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